Life is not fair; get used to it. – Bill Gates
On the face of it, it looks like the bulls managed to triumph yesterday after yet another volatile day. But, a close look will tell you that it was only select index heavyweights, particularly Reliance, which won the day for the bulls. And don’t be surprised if Reliance alone pulls down the bulls later. The broader market remained weak. Market breadth was also negative though traded volume and the turnover climbed. FIIs too have turned net sellers of late though yesterday's provisional figure shows they were net buyers. Coming to today's session, we expect a lower opening on the back of the overnight fall on Wall Street and weak Asian markets. Intra-day gyrations is something one will have to get used to.
Global markets are witnessing lot of choppiness over the past few days owing to renewed worries over inflation and its fallout on interest rates. In India too, similar concerns are still weighing on the markets. The stronger than expected IIP data for April and FY07 could heighten the pressure on inflation and hence interest rates in the next few weeks or months. The market will not take kindly to another monetary tightening measure from the RBI.
The monsoon factor is yet to play out fully. It may have some bearing on the economy in the current fiscal though its contribution to the GDP has shrunk considerably. A Bank of Japan meeting this week followed by a Fed meeting on June 28th will provide enough ammunition to the bulls and bears to keep markets choppy.
In the next few days, we will have some idea of India Inc's health by way of the advance tax numbers. Q1 results, especially that of IT companies, will play a key role in deciding the next course of action for the bulls.
FIIs were net buyers of Rs3.35bn (provisional) in the cash segment yesterday while the local institutions offloaded stocks worth Rs808.6mn. In the F&O segment, foreign funds were net sellers to the tune of Rs2.57bn. On Monday, FIIs were net sellers at Rs546mn in the cash segment. Mutual Funds pulled out Rs249mn from the cash segment on the same day.
Time Technoplast Ltd. will list today on NSE & BSE. The premium being talked about on listing is in a range of Rs100-100 per share. The company had fixed a price band of Rs290-315 per share and the issue price was set at Rs315 per share.
US stocks slid after bond yields touched a five-year high. AT&T., JPMorgan Chase and Wal-Mart led the Standard & Poor's 500 Index and Dow Jones Industrial Average to their first drop in three days.
The 10-year Treasury note extended a five-week slump, pushing the yield to as high as 5.27%, on expectations that central banks from China to the UK will raise interest rates to curb inflation.
The S&P 500 slid 16.12 points, or 1.1%, to 1493. The Dow Jones Industrial Average plunged 129.95 points, or 1%, to 13,295.01. The Nasdaq Composite Index lost 22.38 points, or 0.9%, to 2549.77.
After the close, the 10-year Treasury note went as high as 5.3%, the highest in five years. Bond prices have been tumbling, and yields rising, in the last few days on worries that rising price pressures coupled with a possible pick up in the economy will force the Fed to raise its target rate.
In currency trading, the dollar rose versus the euro and the yen. COMEX gold for August delivery fell $5.90 to settle at $653.10 an ounce. US light crude oil for July delivery fell 62 cents to settle at $65.35 a barrel on the New York Mercantile Exchange.
European stocks weakened. The pan-European Dow Jones Stoxx 600 index declined 0.5% to 387.11. The UK's FTSE 100 closed down 0.7% at 6,520.40, the German DAX Xetra 30 dropped 0.4% to 7,678.26 and the French CAC-40 lost 0.7% at 5,898.16.
Stocks in Brazil and Mexico fell, as investors weighed concerns about the impact of rising US Treasury bond yields and possible interest rate increases in other emerging markets. In Brazil, the Bovespa index fell 980 points, or 1.9%, to 51,797.14. IPC index of 35 most-traded stocks fell or 225 points, or 0.7%, to 31,608.59.
Asian stocks fell after US bond yields climbed to a five-year high. The Morgan Stanley Capital International Asia-Pacific Index dropped for the fourth time in five days after yields on 10-year US Treasury notes rose to the highest in five years. Toyota and Samsung Electronics led declines among companies that rely on global sales.
The MSCI index slid 0.7% to 149.66 as of 10:10 a.m. in Tokyo, poised for the lowest close since May 30. BHP Billiton led mining shares lower after metals prices retreated. Benchmarks declined around the region, with Japan's Nikkei 225 Stock Average dropping 0.8% to 17,623.78.
A measure of six metals traded on the London Metal Exchange dropped 2.4% yesterday. Copper slipped 2.5%, zinc fell 1.1% and nickel slumped 5.8%.
Bulls made a come back in the final hour of the trading session as heavy weights like Tata Steel, ONGC, ACC, Reliance Industries and ICICI Bank lifted the benchmark Sensex 14100mark after hitting the day’s low of 13946.99. The Oil & Gas index led from the front and others like Banking and Metal index followed suit. Cement stocks gained ground on back of fresh buying however, Auto and Technology socks were the major laggards. Finally, the 30-share Sensex added 47 points to close at 14130. NSE-50 Nifty was up by 9 points to close at 4155.
Tata Steel surged by over 4% to Rs603 after Corus announced that they would increases Wire Rod prices by atleast 7%. The scrip touched intra-day high of Rs608 and a low of Rs580 and recorded volumes of over 55,00,000 shares on NSE.
L&T marginally gained by 0.5% to Rs1906 after the company announced that they have secures Rs1.14bn order from SAIL and Rs8.77bn order from ONGC. The scrip touched intra-day high of Rs1929 and a low of Rs1881 and recorded volumes of over 9,00,000 shares on NSE.
IKF Technology was frozen at 5% upper circuit to Rs8.31 after the company announced that they would mull bonus issue on 23rd June. The scrip touched intra-day high of Rs8.31 and a low of Rs7.99 and recorded volumes of over 55,00,000 shares on NSE.
Rajesh Exports edged lower by 0.4% to Rs515. The company announced that they would develop 5 properties from its Land bank. The scrip touched intra-day high of Rs529 and a low of Rs508 and recorded volumes of over 2,00,000 shares on NSE.
Diamond Cables was down 0.2% to Rs164. The company announced that they have secured order worth Rs750mn. The scrip touched intra-day high of Rs166 and a low of Rs150 and recorded volumes of over 1,00,000 shares on NSE.
Cement stocks witnessed fresh buying after being on the side lines in previous weeks. ACC advanced by 5.6% to Rs805, Gujarat Ambuja gained by 0.7% to Rs110, Grasim was up by 1.5% to Rs2388 and India Cement surged 3.7% to Rs173.
Banking stocks slipped lower on back of selling pressure. Frontline stock like SBI slipped by 0.6% to Rs1332, HDFC Bank was down by 1% to Rs1088, Union bank, Bank of India and Bank of Baroda were the major losers among the Mid-Cap stocks. However ICICI Bank gained 2% to Rs919.
Metal stocks also reversed its losses led by gains in heavy weight Tata Steel as the scrip surged by over 4% to Rs603, SAIL advanced by 3% to Rs130 and Sterlite Industries gained 1% to Rs704. However, National Aluminum declined 1.5% to Rs253.
Technology stocks also slipped as Indian rupee again strengthened against the US Dollar. Satyam Computer has dropped by 3.88% to Rs478, Wipro was down by 0.8% to Rs538, Polaris declined by 2.3% to Rs158 and HCL Tech slipped 1.8% to Rs339.
Results Today:
Asian hotels, EIH Associated Hotels, Rajshree Sugars and Wyeth.
Insider Trades:
Shree Renuka Sugars Limited: Dr. Bantval Prabhakara Baliga, Director has purchased from open market 10000 equity shares of Shree Renuka Sugars Limited on 5th June 2007.
Prime Securities Limited: N Jayakumar, President has purchased from open market 50000 equity shares of Prime Securities Limited on 6th june, 2007.
Aurobindo Pharma Ltd: Standard Chartered Private Equity (Mauritius) Ltd. Has sold in open market 1334630 equity shares of Aurobindo Pharma Ltd from 15th May to 4th June, 2007.
Lower Circuit:
Ruby Mills, Tripex Overseas, SREI Infrastructure, Mercator Lines, Marksons and BF Utilities.
Upper Circuit:
Shree Ashtavinyak, UTV, Mascon Global, XL Telecom, IKF Technology, Yashraj Securities, Godrej Industries
and Shaw Wallace.
Delivery Delight (Rising Price & Rising Delivery):
Amtek Auto, Apollo Hospitals, Bajaj Hindustan, Biocon, Federal Bank, Gujarat Ambuja Cements, HCL Infosystems, Hexaware, HLL, HPCL, ICICI Bank, Jaiprakash Associates, Reliance Industries, Tata Chemicals, TISCO and UTI Bank.
Abnormal Delivery:
Tata Steel, Punjab Tractors, ICICI Bank, Dabur India, GlaxoSmithKline Pharma, Gujarat Heavy Chemicals, Kotak Mahindra Bank, Finolex Cables and Aventis Pharma.
News Headlines:
FM says India intends to reduce demand in Real Estate, Housing
Corus increases Wire Rod prices by at least 7%
IKF Technologies to mull bonus issue on 23rd June
Gulf Cement signs accord with Simplex for Qatar plant
Rajesh Exports to develop 5 properties from its Land bank
Diamond Cables gets order worth Rs750mn
Cadila gets tentative approval for Amlodipine Besylate
L&T gets Rs8.77bn order from ONGC
Praj Industries forms a JV with Aker Kvaerner Netherlands